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01. 23. 2018

Open banking: is it to the liking of customers? – W.UP Digital Banking Weekly

The new PSD2 regulations has taken effect in the EU, offering the opportunity to launch open banking. But how will customers react? Maybe they are not that willing to share their data.

Open banking: is it to the liking of customers?

Launching PSD2: customers not so excited?

The second Payment Services Directive (PSD2) took effect in the EU on Saturday 13 January, bringing with it the start of open banking. Finextra said the prospect of a sudden revolution is likely to be thwarted by unresolved technical and regulatory issues and a lukewarm reception from consumers.

A recent Accenture survey found that two thirds of consumers are reluctant to share their details with third party providers and “overwhelmingly trust their bank with financial information”, according to the report. Others have highlighted consumers’ fears around the security of their data in the open banking era.

How mobile-only banks cash in on millennials

The mobile-first and mobile-only digital banking market is currently underdeveloped and wide open for business, according to SD Times. These disruptor banks have streamlined business plans, which often leads to lower operating expenses that enable them to pass along lower fees, or even no fees, to their customers.

Digital banks, like N26 or Monzo, offer simplified, more transparent business practices, easy-to-navigate smartphone and tablet user interfaces and more efficient customer service – all the features the millennial workforce that has grown up mobile hunger for.

Future bank products will focus on micro deals

Banks need to make money on new products and services, from things that don’t exist yet, in the same way that children will need to find jobs that don’t exist yet, Chris Skinner writes. He believes the most likely products will involve information analytics, predictive analytics and location analytics.

The products will no longer be big ticket items of major payments or large loans, but it will all be micro. “Maybe I need to cover the weekend and rather than getting a payday loan, I get a bank loan. In this case, for three days at 0.1% interest and no loan opening or closing fees,” Skinner adds.

You are a number: a new experiment in social banking

A three-digit credit score can dictate your place in society in China, according to a Wired report.

America invented the credit score. But now companies on the other side of the globe are taking the idea to the extreme, using big data to track and rank what you do—your purchases, your pastimes, your mistakes. Did you cheat at your exam as a student or don’t have the right friends? Your score will plummet.

Digital wake-up call